Accuweather reported deadly storms ripping through the central United States through the night of April 2, 2025, leaving a trail of destruction, widespread power outages, and at least four confirmed fatalities across multiple states. Tornadoes, hail, and severe flooding battered communities from Texas to Pennsylvania in one of the most intense severe weather outbreaks in recent years.

Catastrophic Damage in Tennessee

Daylight revealed staggering tornado damage in Selmer, Tennessee, located about 90 miles east of Memphis. Entire neighborhoods were flattened, vehicles tossed, and buildings destroyed. At least two tornadoes were confirmed in the region, and authorities believe more may have occurred, given the extensive damage and ongoing search for missing persons.

Three storm-related deaths have been reported in Tennessee: one in McNairy County (Selmer), one in Obion County, and another in Fayette County, where a tornado flipped a modular home, trapping and killing one individual. Several others were hospitalized. Emergency crews, including state troopers and firefighters, continue to comb through the wreckage in search of survivors.

Missouri Fatality Brings Death Toll to Four

In Missouri, one person died between Advance and Delta as storms surged across the state Wednesday night. The Missouri State Highway Patrol also confirmed a trooper was injured at his home in Advance but has since been released from the hospital.

A total of 27 tornadoes were reported in the last 24 hours. Early ratings include an EF0 in Bates County, an EF2 in Cooper County, and an EF1 in Vernon County.

Arkansas Devastated by Massive Tornado

Arkansas was slammed by a “large and destructive tornado” near Lake City on Wednesday evening, prompting the National Weather Service to issue a rare tornado emergency. Arkansas Governor Sarah Huckabee Sanders declared a state of emergency, citing widespread storm damage across nearly twenty counties. Though four people were injured, there are no reported fatalities in Arkansas at this time.

Unprecedented Tornado Warnings and Severe Weather Alerts

The National Weather Service issued 728 warnings on Wednesday, the third-highest number ever recorded in a single day. This included 284 tornado warnings—also the third-highest in history. The concentration of warnings was most intense across western Tennessee, with tornado emergencies declared in both Arkansas and Tennessee.

Severe Weather Continues and More Threats Loom

Storms and heavy rain are ongoing across a 1,500-mile corridor from Texas to Pennsylvania. AccuWeather meteorologists warn that further severe weather, including tornadoes and flooding, is expected Thursday through Saturday. Tropical moisture originating from the Caribbean is contributing to excessive rainfall, raising concerns over basement flooding and compromised storm shelters.

Power Outages and Flooding Across Multiple States

More than 300,000 power outages were reported across several states as of Thursday morning:

• Indiana: 129,000
• Ohio: 80,000
• Kentucky: 42,810
• Tennessee: 18,606
• Arkansas: 25,000
• Missouri: 11,407
• Mississippi: 11,077

In Indianapolis, multiple vehicles were submerged in floodwaters, though no entrapments were reported. Officials urged residents to avoid driving through flooded roads.

The Los Angeles Times has reported that State Farm General is pursuing a substantial 39% rate hike for its Personal Liability Umbrella policies in California, according to a filing with the California Department of Insurance. The request follows a series of recent increases and comes amid significant financial pressures related to recent catastrophic wildfires.

The umbrella policy, offered as an add-on to existing homeowners and auto policies, provides extended liability protection for incidents such as serious auto accidents, property damage, injuries like slip-and-falls, and even claims of libel or slander.

If approved, the new rate would go into effect on August 1, 2025. It follows a 29% increase that took effect March 1, as well as two previous hikes in 2024 — one for 15% and another for 40%. Prior to those adjustments, the last increase to the umbrella policy had been in 2020.

Rising Costs and Claims Cited as Reasons

State Farm attributed its rate hike request to an increase in personal liability costs across the insurance industry, citing more frequent accidents, escalating medical bills, and larger legal settlements. The company also noted a higher volume of claims overall.

This request comes as the company is also seeking an emergency 22% rate increase for homeowners coverage, tied to the devastating wildfires that struck Los Angeles County on January 7, 2025 — including incidents in Pacific Palisades and Altadena. State Farm General reported it has paid nearly $2.5 billion on more than 10,000 fire claims, with total expected payouts reaching approximately $7.6 billion. After reinsurance reimbursements, net losses are projected at about $600 million.

State Oversight and Public Hearing

California Insurance Commissioner Ricardo Lara provisionally approved the 22% homeowners rate hike in March, but also scheduled a public hearing for April 8 before an administrative law judge. The judge will issue a proposed decision, which Lara may accept, reject, or modify.

Commissioner Lara has also requested that State Farm halt its policy nonrenewals across the state, and has urged the insurer’s parent company to provide $500 million in capital to help stabilize its financial position.

Industry-Wide Cost Increases

While declining to comment specifically on State Farm’s umbrella rate filing, Janet Ruiz, spokesperson for the Insurance Information Institute, noted that umbrella liability costs have risen industry-wide. These policies typically cost a few hundred dollars annually for $1–$2 million in coverage, but increases in medical expenses, severe auto accidents, and social media-related libel and slander claims have driven up losses for insurers.

“When all those things are rising then we have to pay those losses,” Ruiz said.

World Insurance Associates LLC, a Top 50 Insurance Brokerage, has announced that it acquired the business of Royalty Insurance Services of Van Nuys, CA, on January 1, 2025. Terms of the transaction were not disclosed. Royalty has been providing commercial trucking insurance for over 23 years. They offer specialized insurance solutions for trucking businesses —from long-haul to local trucking. "At Royalty Insurance Services, personalization is key," says Oganes Sepuhyan, President, Royalty Insurance Services. "We realize insurance is more than a line-item expense—it is a vital part of our customers' business safety net, so we work with them to customize a plan that meets their unique insurance needs. We are excited to join World, who has its roots in the trucking industry, and we look forward to continuing to grow our business." "I would like to welcome Royalty to the World family," says Rich Eknoian, CEO and Co-Founder of World. "They are well known in the trucking industry, and they have an experienced team of insurance professionals dedicated to providing their customers with the best coverage at the best price. I know they will continue to be successful as part of World." Giordano, Halleran & Ciesla provided legal counsel and MarshBerry advised World on the transaction. Fennemore Law provided legal counsel to Royalty on the transaction. No other advisors, diligence firms, or legal counsel were disclosed. About World Insurance Associates LLC
World Insurance Associates (World) is a nationally ranked financial services organization headquartered in Iselin, N.J., that serves its clients from more than 300 offices across the U.S. and U.K. World's comprehensive network of brokers and specialists empower people to make informed decisions to improve their risk management outcomes, modernize their benefits programs, and help achieve their long-term financial goals. Using data-driven analytics, World's advisors innovate new products and solutions tailored to clients' needs across commercial and personal insurance and bonds, employee and executive benefits, wealth management and retirement plan services, private client services, and payroll & HR solutions. For more information, please visit www.worldinsurance.com.

Bamboo Insurance, a trusted customer-focused insurance provider, has announced a strategic partnership with Incline P&C Group, a leading insurance program carrier. This partnership leverages Bamboo's advanced underwriting platform and Incline's superior financial strength to bring additional capacity to the California market. Bamboo has established itself as the premier California underwriting franchise since launching in 2018, and will begin underwriting admitted and non-admitted homeowners programs with Incline effective immediately. Leveraging technology and data, Bamboo has been a solution for thousands of Californians since 2018. With this partnership, Bamboo and Incline are well-positioned to help more customers navigate the complexities of property insurance while delivering on a promise to provide transparent, reliable, and customer-centered solutions. "The challenges facing the California insurance market are undisputed. The Bamboo team takes great pride in finding solutions that meet the needs of our customers in these difficult times," said John Chu, CEO of Bamboo Insurance. "This partnership will provide affordable insurance coverage for hundreds of thousands of Californians in the coming years. At Bamboo, we want California to know that we were here before the crisis, have remained open, and are committed to being a solution in future – we are here for good. The Incline partnership is a major step forward in delivering on that commitment." "Incline is excited to partner with Bamboo, an industry leader with vast experience in the homeowner's space," said Incline President and CEO Chris McClellan. "Such characteristics pair well with our team's experience, underwriting discipline, and premier risk management expertise. We look forward to a long and productive partnership." California homeowners can start their quote by visiting bambooinsurance.com or by calling (833) 922-6266. Independent agents can learn more about offering the product by emailing bamboo@bambooinsurance.com. About Bamboo Insurance Bamboo Insurance is a modern, customer-focused insurance provider dedicated to simplifying the insurance experience. While we leverage technology as a tool to streamline processes, our true difference lies in our commitment to being a human-first company. We take the time to understand our customers' needs, offer transparent solutions, and provide a personal touch in everything we do. Bamboo is a Managing General Agency licensed to sell property-casualty insurance products; NPN 18657046; CA License #0M31082. Through a customer-centered approach, Bamboo is transforming the way people think about and interact with their insurance. For more information, visit www.bambooinsurance.com. About Incline Property & Casualty Group Incline P&C Group is privately owned and operated with an exclusive focus on the program insurance market. Incline has a team of over 90 employees; headquartered in Austin, TX with offices in Dallas, TX. Incline's executive team's experience and expertise combined with effective underwriting discipline and risk management enables Incline to carry an A- (excellent) rating from AM Best and Financial Size Category of VIII. For more information on Incline P&C Group, visit https://inclinepc.com/.

A legal dispute between Eagle, Idaho, residents and the Two Rivers Subdivision Homeowners Association (HOA) will proceed to trial following developments involving a countersuit over the HOA’s use of the neighborhood clubhouse.

Original Complaint by the HOA

In late 2023, the Two Rivers HOA filed a complaint with the Fourth District Court in Ada County, seeking to stop the homeowners from running their small businesses out of their homes. The HOA cited a rule in the community’s covenants, conditions, and restrictions (CC&Rs) that prohibits “any trade, business or professional activity” in the subdivision, arguing that business-related traffic violates the residential nature of the area.

Allegations of Uneven Enforcement

The homeowners challenged the HOA’s enforcement, pointing to more than 100 businesses registered in the neighborhood. They named entities registered to the HOA board president and a city council member who also serves on the board. They contend this demonstrates inconsistent application of the rules.

Summary Judgment and Injunction

In May 2024, Judge Derrick O’Neill mainly ruled in favor of the HOA, stating the CC&Rs clearly prohibit business activity and apply to both the couple’s businesses. He rejected the homeowners’ argument that the rule’s application would lead to “absurd results,” citing an Idaho Supreme Court decision that upholds rules with clear wording, even if the outcome seems unfair.

As a result, the court issued a permanent injunction in June 2024, preventing the homeowners from operating their in-home clothing alteration business.

Remaining Legal Question

Despite the HOA’s partial victory, the judge allowed part of the case to proceed, noting an unresolved issue: whether the HOA waived its right to enforce the ban by permitting similar business activity by other homeowners over time. This question will be addressed in the jury trial tentatively scheduled for December 2025.

New Countersuit Over Clubhouse Rentals

In February 2025, the same homeowners filed a countersuit against the HOA, asserting that the HOA itself violates the same CC&Rs by renting out the subdivision’s clubhouse to non-residents. According to their filing, the HOA began this practice around 2007 or 2008 to generate maintenance revenue.

The countersuit claims that this use of the clubhouse constitutes a prohibited business activity. The homeowners also raised concerns about inadequate parking for large events, stating that the clubhouse’s 113-person capacity contrasts with only 41 parking spaces, causing disruptions to residents.

They argue the HOA lacks the authority to rent out common areas for monetary gain and that doing so breaches the subdivision’s rules.

Next Steps

The case continues with both the original claims and the countersuit, which will be examined further in the upcoming trial.

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In the wake of destructive wildfires fueled by dry weather and strong winds across Oklahoma, the National Insurance Crime Bureau (NICB) has issued a warning about potential contractor fraud targeting residents and business owners in the region. The organization, which works closely with law enforcement and the insurance industry to combat insurance fraud and related crimes, is emphasizing the heightened risk of fraudulent activity during disaster recovery efforts.

Coordinated Response in Disaster Areas

As part of its disaster response strategy, NICB agents are actively coordinating with local, state, and federal authorities, along with member insurance companies, to support recovery and assist in fraud prevention. Once emergency response efforts subside, NICB plans to have agents on the ground in Oklahoma to work alongside their partners in identifying and addressing fraud schemes that commonly emerge during the rebuilding process.

Warning Against Fraudulent Contractors

Niambi Tillman, regional director at NICB, highlighted the risks, stating, “Spring weather systems can result in the catastrophic weather event Oklahoma is experiencing with these wildfires. Local residents must be aware that some contractors may promise help, ask for the assignment of benefits, and after being paid, disappear, never to be heard from again.”

These schemes often involve offers for debris removal, tree services, construction, or even medical services. NICB warns that these individuals or businesses may use high-pressure tactics — particularly through door-to-door solicitation or phone calls — and pressure homeowners and business owners to sign incomplete contracts or provide upfront payments without proper documentation.

Fraud Prevention Guidance

To support fraud deterrence, NICB has outlined several best practices for residents and business owners impacted by the wildfires:

• Engage your insurance carrier first: Contact your insurer to understand your coverage before committing to any third-party service providers.
• Seek multiple bids and vet contractors: Compare estimates, check references, and verify identities. Be cautious of out-of-state contractors or those using unfamiliar vehicle registrations.
• Review all contracts carefully: Avoid contracts with blank fields and resist pressure to sign immediately. Document all agreements in writing, including scope of work and payment terms.
• Report suspected fraud: Suspicious activity should be reported promptly to both law enforcement and insurance providers.

As disaster recovery continues in Oklahoma, NICB’s proactive engagement aims to prevent additional financial harm to affected communities. The bureau encourages vigilance and collaboration between residents, insurers, and authorities to reduce the risk of exploitation during this vulnerable period.

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Marsh McLennan Agency (MMA), a business of Marsh and a leading provider of business insurance, employee health and benefits, retirement and wealth, and private client insurance solutions across the US and Canada, has announced the acquisition of Arthur Hall Insurance, a full-service insurance agency based in West Chester, Pennsylvania. Terms of the acquisition were not disclosed. Founded in 1966, Arthur Hall provides commercial and personal lines expertise to clients across the country. Its specialties include the life sciences, information management, non-profit, craft beverage manufacturing, and municipal industries. All Arthur Hall employees, including President Jim Denham, will join MMA and continue to operate out of its two office locations in West Chester and Wilmington, Delaware. “Our clients are facing challenges on multiple fronts, and our value lies in the ability to foresee these dynamics and equip them for any scenario,” said Andrew Neary, CEO of MMA’s East region. “We look forward to bringing the Arthur Hall team’s business insurance expertise to our clients in the region, while simultaneously establishing a new presence for MMA in Delaware.” Mr. Denham added: "MMA has a unique power of perspective that is unmatched in the industry. In our ongoing pursuit of enhancing client outcomes, it became clear that joining MMA was our best path forward for our clients and colleagues, providing access to a wide range of risk mitigation strategies and a network of experts for clients and resources to enhance our colleagues’ careers.” About Marsh McLennan Agency Marsh McLennan Agency, a business of Marsh, is a leading provider of business insurance, employee health & benefits, retirement & wealth, and private client insurance solutions across the US and Canada. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit marshmclennan.com, follow us on LinkedIn and X. About Marsh Marsh, a business of Marsh McLennan (NYSE: MMC), is the world’s top insurance broker and risk advisor. It is a global leader in risk, strategy, and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer, and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build confidence to thrive through the power of perspective. For more information, visit marshmclenan.com or follow us on LinkedIn and X. Get the latest insurance market updates and discover exclusive program opportunities at ProgramBusiness.com. 

Universal Insurance Holdings, Inc. has announced the successful conclusion of a state review of its claims data related to Hurricane Irma, which occurred in September 2017. The Company refuted all allegations of fraudulent submission, and the matter has been formally dismissed by the state. The Company successfully commuted its Hurricane Irma losses in 2023 with full transparency, and all parties were in complete agreement with the result. The Company is pleased that the state acknowledged its cooperation, noting that the Company “fully and completely cooperated” with the state and provided all requested information. Today’s resolution is within an accrued amount established by the Company more than two years ago. As a result, there is no current or future financial impact to the Company or its subsidiaries. The review arose when a former employee in the Company’s claims operation who left the company in mid-2018 and who had no involvement in or familiarity with the Company’s data analytics team or Florida Hurricane Catastrophe Fund (“Fund”) reporting procedures alleged that the Company improperly included certain non-Irma claims in preliminary reports submitted to the Fund. The assertions contain numerous fundamental factual inaccuracies and gross mischaracterizations. The Company’s estimated Hurricane Irma losses during the former employee’s tenure remained well below the Fund threshold. Further, the Fund has an extensive multi-year interim reporting process in which data is subject to review and examination. The Fund also has a thorough final analysis known as commutation in which the Fund and insurer evaluate loss data to determine a full and final settlement. This process, which is standard for all insurers, resulted in the parties’ mutual commutation agreement. The Company recognized throughout the review that the underlying assertions lacked merit and were frivolous. The Company monitors and tracks claims data on a daily basis. Over time, information about each claim evolves as the insurer gains information about the cause and origin of the loss. This inherently means that some claims initially identified as hurricane claims are later determined to not be associated with the hurricane, and conversely some claims intentionally or unintentionally not reported as hurricane claims are determined to be associated with a storm. The Company commenced a comprehensive review of its Hurricane Irma data prior to and during commutation. This extensive analysis resulted in the Company’s reassessment of approximately one percent of its Hurricane Irma claims. Today’s conclusion includes the state’s full and final dismissal of the former employee’s assertions. The Company has agreed to pay certain fees and costs associated with the review to avoid costs of litigation. Hurricane Irma was the single largest loss event in the Company’s history. Florida’s pre-reform laws and resulting abuses that generated an excessive litigation environment drove the storm’s costs from an initial estimate of $450 million to $2 billion. “We are pleased the review has come to a close and the state dismissed the case,” said Chief Executive Officer Stephen Donaghy. “We look forward to continuing to serve Floridians as market reforms are leading to more affordable home insurance options for consumers.” About Universal Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding company providing property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We provide insurance products in the United States through both our appointed independent agents and our direct online distribution channels, primarily in Florida. Learn more at universalinsuranceholdings.com or get an insurance quote at Clovered.com. Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.

A newly released report by Bain & Company, Bridging the Protection Gap: Affordability, Access, and Risk Prevention, outlines the evolving dynamics of the global insurance industry. Authored by Sean O'Neill, Andrew Schwedel, Daniel Jones, and Tanja Brettel, the report explores how insurers are navigating rising costs, shifting customer expectations, and emerging risks while positioning for future resilience.

Growth Pressures and Market Headwinds

Recent growth in the insurance sector — particularly in property and casualty (P&C) and life insurance — has largely stemmed from premium rate increases and favorable interest rates. However, Bain emphasizes that this momentum is unlikely to continue. Profitability in key areas such as personal auto and property lines has come under strain due to increasing claims costs and regulatory pricing constraints. At the same time, life insurance products are losing relevance, especially among younger consumers.

A significant concern is the widening protection gap: by 2030, only one-quarter to one-third of damages from natural disasters are expected to be insured. Life insurance coverage is projected to remain below 50% for mortality risks. Addressing these gaps will require solutions focused on both affordability and consumer engagement.

Six Strategic Themes for Insurers

The report identifies six core themes that insurers must address to overcome current challenges and deliver long-term value:

1. Responding to Shifting Customer Priorities

Affordability remains a major barrier in P&C insurance, particularly in regions affected by climate-related disasters. In many U.S. states, premiums have climbed sharply while regulatory restrictions prevent price adjustments that reflect rising risks. In life insurance, demographic trends and changing savings behavior are reshaping demand, requiring more flexible and portable products aligned with today’s workforce.

2. Tackling Emerging Risks Through Prevention and Innovation

The frequency and severity of natural disasters, cyberattacks, and new transportation technologies are reshaping risk models. Innovations like smart home systems, telematics, and wearable health tech offer insurers opportunities to reduce claims through prevention. However, public-private partnerships will be essential to manage systemic risks such as climate events and cyber threats.

3. Reimagining Customer Engagement

Digital channels and embedded insurance are changing how consumers research and purchase coverage. Insurers are experimenting with partnerships and social media strategies to reach target audiences, particularly younger consumers better. In life insurance, more effective targeting and streamlined customer journeys are critical to boosting engagement and conversion rates.

4. Leveraging AI and Unstructured Data

The insurance industry is undergoing a transformation driven by artificial intelligence and a surge in unstructured data—from call logs to dashcam videos. Bain anticipates significant gains in affordability, access, and operational efficiency through widespread AI adoption. However, realizing this potential requires rethinking traditional workflows and investing in new capabilities.

5. Preparing for the Retirement Cliff

An aging workforce threatens to disrupt key insurance functions such as underwriting and claims. The report stresses the importance of accelerated training, AI tools for productivity, and reskilling to offset looming retirements. Insurers must adapt job roles to reflect an increasingly data- and AI-driven environment.

6. Expanding Use of Alternative Capital

Alternative capital solutions—such as insurance-linked securities and collateralized reinsurance—are gaining traction as insurers seek to manage capital more efficiently. Bain notes that while regulators generally support these instruments, private capital alone may not be sufficient for addressing extreme events. Deeper collaboration with governments remains crucial.

Looking Ahead: A Call for Proactive Transformation

Bain concludes that insurers are at a strategic inflection point. The firms that modernize their products, adopt AI at scale, and retool their workforce will be better positioned for sustainable growth. These efforts, if successful, will not only improve insurer performance but also enhance societal resilience in the face of growing risk.

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Beginning April 3, new 25% tariffs on auto imports are expected to affect multiple layers of the automotive and insurance industries. While positioned as a move to bolster domestic manufacturing and generate an estimated $100 billion annually, the tariffs will likely introduce new cost pressures across the vehicle lifecycle — from imported parts and repair expenses to downstream impacts on claims and premiums.

The implications are particularly important for insurance professionals. With repair costs expected to rise due to the global nature of auto part sourcing, insurers may face an increase in claims severity that could ultimately lead to higher rates. Dealerships and repair shops are also anticipating operational challenges as they manage limited inventories and rising overhead.

What follows is an overview of how these tariffs may influence repair economics, dealership dynamics, and insurance pricing in the months and years ahead.

What the Tariffs Cover

The new tariffs primarily target imported vehicles and auto parts, including engines, transmissions, powertrain components, and electrical systems. With about 60% of auto replacement parts in the U.S. sourced from countries like Mexico, Canada, and China, many routine repairs could become more costly almost immediately. These tariffs will apply not only to new imports but also to the foreign-made components already embedded in the supply chain.

Impact on Vehicle Repairs

Because many U.S. vehicles—domestic and imported alike—rely on globally sourced parts, consumers will likely see rising repair bills. Industry experts note that the costs may hit sooner than expected, especially for parts already under price pressure due to limited availability. Small business owners in the repair sector are preparing to pass along these increases to customers, citing thin profit margins and limited alternatives.

For example, a Georgia-based repair shop owner reported an order for a vintage German part was canceled because of tariff concerns, leaving no domestic replacement options. With many foreign cars on the road, repair shops anticipate significant disruptions.

Dealership Challenges

Dealers, especially those focused on the economy or used vehicles, may also feel the strain. Not only could the cost of importing cars rise, but preparing used cars for resale — often involving foreign-made replacement parts — could also become more expensive. Some dealerships are exploring ways to stock up on parts in advance, though this presents risks if tariffs are later rolled back or modified.

Transparency and customer communication will become even more critical as prices adjust across the market. While some buyers may rush to secure vehicles before price hikes, longer-term pressures on inventory and margins remain.

Insurance Premiums in the Spotlight

The effect of tariffs isn’t limited to upfront car or repair costs. Insurance premiums are also expected to climb—but on a delayed timeline. Industry associations estimate that auto insurance claim costs could rise by $7 to $24 billion annually as repairs become more expensive. Although these increases might take a year or more to reach policyholders due to rate-filing procedures, the upward trend in premiums is already well underway.

Auto insurance premiums rose 14% and 12% in 2023 and 2024, respectively. Before these tariffs were introduced, another 7% increase was projected for 2025, and the actual rate may now be even higher.

A Cost Chain Reaction

While the administration projects the tariffs could generate $100 billion annually and incentivize domestic manufacturing, economists and industry experts caution that global supply chain disruptions will affect more than just new car prices. From repair bills to insurance premiums, the total cost of car ownership may rise in the coming months, regardless of where a vehicle was originally built.

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A recent testimony by the former CEO of a Texas-based health insurance provider has sparked widespread concern and prompted a state investigation into the company’s practices.

Surveillance Allegations Emerge in Legislative Hearing

Mark Sanders, former CEO of Superior HealthPlan in Austin, admitted during a Texas House committee hearing that the company had hired private investigators to collect background information on a wide range of individuals, including patients, healthcare providers, state lawmakers, and journalists.

The hearing, held by the Texas House Delivery of Government Efficiency Committee, focused on Medicaid procurement. During this session, Sanders revealed details of the company’s surveillance tactics, which reportedly began in 2017 when he assumed the CEO role.

Public Reaction and Immediate Consequences

The revelations quickly drew criticism from both lawmakers and the public. Texas Attorney General Ken Paxton announced that his office is investigating whether the surveillance efforts involved any illegal activities, including potential attempts to influence state contracts or avoid paying claims.

State Representative Giovani Capriglione questioned the justification behind surveilling individuals who were both customers and public officials. He expressed concern that taxpayer funds may have been used to finance the investigations.

In response to the controversy, Superior HealthPlan’s parent company, Centene, confirmed Sanders’ dismissal and emphasized that the actions described do not reflect the company's current values or leadership practices.

Legislative and Legal Implications

Lawmakers have begun drafting legislation to prevent future incidents of this nature. Capriglione stated that any company engaging in similar behavior would be disqualified from receiving future government contracts.

Another state representative, Tony Tinderholt, expressed alarm after reviewing alleged email correspondence detailing the surveillance activities. He called for accountability and supported the attorney general’s probe into the matter.

Company Acknowledges Policy Change

During his testimony, Sanders noted that the company had discontinued what he referred to as “routine” background checks on customers. He described the investigations as limited to publicly available information but acknowledged that the practice was ethically questionable.

While the full scope of the investigations and their impact remains to be determined, this incident has reignited discussions about privacy, ethics, and oversight in the health insurance industry.

Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com. Photo courtesy: News 4, San Antonio

From homeownership to auto insurance, consumers across the U.S. are feeling the sting of rising costs — and not just because of inflation. A growing number of experts point to another, lesser-known culprit: widespread abuse of the legal system. Fueled by aggressive attorney advertising, frivolous lawsuits, and secretive litigation funding, this trend is creating a ripple effect that reaches every household and business. The result? Higher insurance premiums, rising operational expenses, and a troubling hit to the economy.

The Real Cost of Legal System Abuse

According to the American Property Casualty Insurance Association (APCIA), the price tag of legal system abuse is staggering. In 2023 alone:

• Plaintiff lawyers spent $2.4 billion on over 26 million ads, many designed to provoke litigation.

• Litigation funding surged to $15.2 billion, often backed by private or foreign investors.

• Typical injury awards ballooned by 319%, driven by tactics that aim to sway juries emotionally.

• The economic impact of litigation abuse reached $443 billion—the equivalent of a $3,600-per-household “lawsuit tax.”

These rising costs don’t just hit courtrooms. Insurers — especially those offering umbrella and high-limit liability coverage—are seeing more large claims, forcing premiums to climb. And businesses, facing increasing liability exposure, are passing the added expense along to consumers.

The Threat of Third-Party Litigation Funding

One of the most troubling trends is the rise of third-party litigation funding (TPLF). Unlike traditional loans, these investments are not subject to usury laws, meaning funders can charge litigants interest rates that exceed 200%. These backers treat lawsuits like stocks—betting on someone else’s legal battle for profit.

What’s more, most states don’t require transparency about who is funding a lawsuit, leaving the door open for conflicts of interest—and even foreign influence — in the U.S. legal system.

Why Legal Reforms Are Essential

Without reform, this unchecked system continues to burden American households, stall economic growth, and challenge the integrity of our legal institutions. The APCIA and other experts advocate for:

• Disclosure requirements for litigation funding

• Limits on misleading legal advertising

• Caps on interest rates for third-party litigation loans

• Legal protections for businesses and insurers against abusive litigation practices

These measures aim to restore balance, transparency, and fairness to the civil justice system, ultimately reducing the pressure on insurance markets and consumer wallets.

What’s Next?

Legal reform isn’t just about curbing lawsuits—it’s about restoring trust, affordability, and sustainability across every sector touched by insurance. As lawmakers consider these complex issues, consumers and insurance professionals alike have a role to play in demanding greater accountability and transparency in our courts.

MORE ABOUT ROBERT P. HARTWIG:
Robert P. Hartwig is a Clinical Associate Professor of Risk Management, Insurance, and Finance at the Darla Moore School of Business at the University of South Carolina and Director of the school's Center for Risk and Uncertainty Management. He teaches courses in risk management, insurance, and corporate finance, mentors students, pursues a variety of research interests, and works with insurers, regulators, legislators, and many other insurance industry stakeholders, including media. Dr. Hartwig is also a member of the Federal Reserve Board's Insurance Policy Advisory Committee. Dr. Hartwig serves as a media spokesperson for the property/casualty insurance industry and is quoted frequently in leading publications such as The Wall Street Journal, The New York Times, USA Today, Washington Post, Los Angeles Times, Financial Times, BusinessWeek, Newsweek, U.S. News & World Report, CFO, Fortune, Forbes, The Economist and many others throughout the world. Dr. Hartwig also appears regularly on television, including programs on ABC, CBS, NBC, CNN, CNBC, Fox, PBS, Univision and the BBC. MORE ABOUT LYNNE MCCHRISTIAN:
Lynne McChristian joined the University of Illinois in January 2019. She is the director of the Office of Risk Management & Insurance Research at the University of Illinois in Urbana-Champaign, where she is also a senior instructor teaching insurance and enterprise risk management classes. She has previously held a similar teaching and research position at Florida State University. McChristian's corporate career includes more than 16 years with USAA, the highly regarded insurance and financial services company that primarily serves members of the U.S. military and their families. At USAA, she was responsible for internal and external communication, including crisis and strategic communication planning and media relations. McChristian has also consulted with the Insurance Information Institute and the American Property Casualty Insurance Association, both industry trade groups. She has been a featured columnist for an insurance industry publication and authored research papers on the lessons learned from Hurricane Andrew and on what renewed ties with Cuba could mean for insurance markets. Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.